The difference between cash-on-cash return and internal rate of return is this: time. Presuming the limited partners receive monthly, quarterly, or annual distributions, then the cash-on-cash return is the same. That is, it equals the total distribution for the year divided by the original capital investment. However, the internal rate of return (IRR) varies as it’s different for all three distribution frequencies – monthly, quarterly, and annually – because the IRR accounts for the time value of money.